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HomeMy WebLinkAbout05/19/2026 09.A. Resolution support designation of WA State Opportunity Zones 2.0 !, ,....,i5 • '14'1 � F - BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. 9.A. For Meeting of: May 19, 2026 ITEM TITLE: Resolution supporting the designation of Opportunity Zones SUBMITTED BY: Gary Ballew, Assistant City Manager SUMMARY EXPLANATION: The resolution supports the nomination of three census tracts for Washington State's Opportunity Zones 2.0 designation. The tracts are roughly described as the Mill Site, Downtown Yakima, and East Nob Hill at 18th. These tracts will be submitted to Governor Ferguson before the May 28, 2026 deadline for potential inclusion in the state's set of opportunity zones effective January 1, 2027. The City will work with the Yakima County Development Authority on the application form (attached). Each proposed tract was assessed using Washington's OZ 2.0 three-part test, drawn from the Department of Commerce scoring framework. 1. Community Need Test • Each tract demonstrates economic distress via low median family income and elevated poverty rates, plus elevated unemployment—indicating high need for capital injection. 2. Market/Investment Readiness Test • These zones have demonstrated existing or planned development projects, showing capacity to deploy private capital within the OZ policy timeline. 3. Policy Alignment Test • They align with local and regional planning goals—such as urban infill, corridor safety enhancements, and downtown revitalization—and benefit from supportive municipal policy and infrastructure improvements Proposed Zones • Mill Site: Captures ongoing redevelopment and investment potential in historically industrial lands. • Downtown Yakima: Supports revitalization initiatives in the city's commercial and cultural core. • 18th & Nob Hill: Aligns with planned public improvements and private infill developments around safety and accessibility projects. By approving the resolution, Council formally endorses the nomination of these three tracts as they meet Washington's scoring criteria. It potentially positions the City to unlock OZ 2.0 benefits, primarily capital gains deferrals that support private investment in housing, small business, and infrastructure-advancing equitable growth and neighborhood revitalization. ITEM BUDGETED: N/A 111 STRATEGIC PRIORITY 24-25: A Thriving Yakima RECOMMENDATION: Adopt Resolution. ATTACHMENTS: Resolution for OZ 2.0 Designation.docx Washington State OZ 2.0 Nomination Application Template .pdf Presentation_Opportunity_Zone_2.0 112 RESOLUTION NO. R-2026- A RESOLUTION supporting the nomination of three census tracts within the City of Yakima for designation under Washington State's Opportunity Zones 2.0 Program. WHEREAS, the federal Opportunity Zones 2.0 Program provides long-term investment incentives designed to attract private capital to economically distressed communities; and WHEREAS, the City Council is committed to economic growth as a top priority; and WHEREAS, the State of Washington is authorized to nominate eligible low-income census tracts for Opportunity Zone 2.0 designation beginning in 2026, with final designations to take effect January 1, 2027; and WHEREAS, the Washington State Department of Commerce evaluates proposed census tracts using a three-part test that considers: 1. Community Need, including indicators such as poverty, unemployment, income levels, and historic underinvestment; 2. Market and Investment Readiness, including demonstrated redevelopment activity, infrastructure commitments, and the ability to support private investment; and 3. Policy Alignment, including consistency with adopted local plans, economic development priorities, and community goals; and WHEREAS, the City of Yakima has identified three census tracts that meet the State's eligibility criteria and demonstrate strong alignment with local and regional development priorities: • Mill Site (Census Tract: 53077000200) — an area of significant redevelopment potential on formerly industrial land, supported by infrastructure investment and planned economic activity; • Downtown Yakima (Census Tract: 53077000100) — the city's commercial, civic, and cultural center, where continued revitalization efforts will benefit from long-term investment incentives; • 18th Street & Nob Hill (Census Tract: 53077001503) — a mixed commercial and residential area positioned for infill development, small-business investment, and corridor improvements; and WHEREAS, designation of these census tracts as Opportunity Zones 2.0 would strengthen the City's ability to attract private investment, support housing and commercial redevelopment, expand job opportunities, and promote equitable community growth; now, therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA: Section 1. The City Council supports and endorses the nomination of the Mill Site, Downtown Yakima, and 18th & Nob Hill census tracts for Opportunity Zone 2.0 designation by the State of Washington. 1 113 Section 2. The City Manager or designee is authorized to submit required documentation, letters of support, and related materials to the Washington State Department of Commerce in accordance with state guidelines ADOPTED BY THE CITY COUNCIL this 19th day of May, 2026. Matt Brown, Mayor ATTEST: Rosalinda Ibarra, CMC, City Clerk 2 114 "► Washington State Ili Department of Washington State Opportunity Zones 2.0 2026 141,,Commerce CENSUS TRACT NOMINATION APPLICATION TEMPLATE Each nomination application may include only one census tract PURPOSE This application collects information to help the Washington State Department of Commerce (Commerce) evaluate census tracts for Opportunity Zone recommended designation. The information you provide will be scored against the published Washington State OZ 2.0 Nomination Application Scoring Criteria. Final designations will remain in place for 10 years and cannot be revised. This template is being provided as a tool to prepare the answers that you will need to enter into the online portal OZ-Nomination-Application I Opportunity Zones to submit the nomination. Guiding Principles Based on best practices from the Economic Innovation Group and lessons learned from the 2018 designation process,Washington's methodology is built around three fundamental tests: • Community Need Test o Does this area genuinely need new investment to grow its economy so that residents can prosper? • Market/Investment Readiness Test o Can this area realistically attract private capital and put it to productive use within the policy's timelines? • Policy Alignment Test o Are local policies investment-friendly and conducive to economic development and potential investments? Are the projected census tract investments aligned to local policy? Key dates Application Period Opens: April 28, 2026 use this link: OZ-Nomination-Application I Opportunity Question/Answer Period: April 28, 2026 to May 21, 2026—send questions to oedcprocurement(a�commerce.wa.gov. Please put"OZ 2.0" in the subject line. Application Deadline: May 28, 2026 at 5:00 PM PDT. Emailed submissions will not be accepted. For technical assistance please review the OZ 2.0 webpagc , definitions and glossary on pages 9-12 of this document,the Frequently Asked Questions, and the pre-proposal conference on May 7, 2026. If assistance is still needed, please email oedcprocurement@commerce.wa.gov. Technical assistance may not be available after 4 p.m. on May 28, 2026. Information provided to the Department of Commerce is subject to public disclosure under Chapter 42.56 RCW: Public Records Act. The information provided in this nomination application will be used to determine the Census Tract recommendation to Governor Ferguson. Information provided here may be released to any member of the public upon agency receipt of a public records request. Section A:Applicant Information Organization Name CIi Organization Type (Select one) [' Associate Development Organization (ADO) [' Economic Development District [' Other Economic Development Organization Washington State Department of Commerce I Opportunity Zones 2.0 2026 I Page 1 115 ' * Washington State Department of Washington State Opportunity Zones 2.0 2026 1i►,Commerce CENSUS TRACT NOMINATION APPLICATION TEMPLATE ❑ City or Town Government ❑ County Government ❑ Federally Recognized Tribe ❑ Housing Authority ❑ Port District ❑ Public Development Authority (PDA) ❑ Qualified Opportunity Funds (QOF) ❑ Other(describe) Click or tap here to enter text. Primary Contact Name Click or tap here to enter text. Title Click or tap here to enter text. email Click or tap here to enter text. Phone use this format: ( ) - Click or tap here to enter text. Mailing Address Click or tap here to enter text. Section B: Census Tract Identification I Identify the census tract you are nominating. Census Tract Information Use map to select the Census Tract -The information will automatically be shown below. Points for economic need will be automatically tallied. See Category 1 Community Economic Need on Scoring Criteria document for the point matrix. If a red location error box displays in the map,just ignore or close it. If a "use your location"prompt pops up,you can decline. Census Tract Number County Rural or Non-Rural Click or tap here to enter text. Part 1: Primary Investment Pathway/ Investment Readiness Site Readiness Check all that apply to this census tract: ❑ Yes Contains brownfield site(s) eligible for redevelopment ❑ Yes Contains underutilized or vacant developable land ❑ Yes Access to water/sewer infrastructure ❑ Yes Broadband infrastructure available ❑ Yes Building permits issued in past 3 years ❑ Yes Electrical capacity for commercial/industrial use available Development Pipeline In this census tract, are there active development projects or identified investment opportunities? If so, please attach supporting documents. Provide responses for up to 3 projects. Click on the numbers 1, 2, and 3 in the circles in the online platform to answer details about each project. Project Status ❑ Yes, parcel(s)or property(ies)within the Census Tract identified for specific project(s). Attach a document demonstrating business plan (project registered, permit(s) applied for, team hired, studies, environmental assessments, etc.). Project Name or ID - Project Name or you can type (enter) Project 1, Project 2, or Project 3. Click or tap here to enter tek Have you secured the parcel(s) or property(ies)? ❑Yes ❑ No Washington State Department of Commerce I Opportunity Zones 2.0 2026 I Page 2 116 "►' Washington State Department of Washington State Opportunity Zones 2.0 2026 Nuf Commerce CENSUS TRACT NOMINATION APPLICATION TEMPLATE List parcel number(s), if known or physical address and name of city or town. Use this page as a general guide to help identify sites Washington Zoning Atlas. Click or tap here to enter text. Are the parcel(s) or property(ies) zoned for the project(s)? ❑ Yes ❑ No Check all zoning that applies to identified parcel(s) or property(ies): ❑ Yes ❑ No Zoned for agricultural use ❑ Yes ❑ No Zoned for commercial development ❑ Yes ❑ No Zoned for industrial development ❑ Yes ❑ No Zoned for multi-family residential development ❑ Yes ❑ No Zoned for renewable energy If water is needed, do you have a letter of availability from the water utility? ❑ Yes ❑ No If yes, please attach. Has a contract been secured with the electric utility that cover the needs of this project? ❑ Yes ❑ No If yes, please attach. ❑ Yes, parcel(s)or property(ies)within the Census Tract identified for undetermined but possible projects? Project Name or ID - Project Name or you can type (enter) Project 1, Project 2, or Project 3. Click or tap here to enter text. List parcel number(s), if known or physical address and name of city or town. Use this page as a general guide to help identify sites Washington Zoning Atlas. Click or tap here to enter Are the parcel(s) or property(ies) zoned for the project(s)? ❑ Yes ❑ No Check all that apply zoning that applies to identified parcel(s) or property(ies): ❑ Yes ❑ No Zoned for agricultural use ❑ Yes ❑ No Zoned for commercial development ❑ Yes ❑ No Zoned for industrial development ❑ Yes ❑ No Zoned for multi-family residential development ❑ Yes ❑ No Zoned for renewable energy If water is needed, do you have a letter of availability from the water utility? ❑ Yes ❑ No If yes, please attach. Has a contract been secured with the electric utility that cover the needs of this project? ❑ Yes ❑ No If yes, please attach. Has an investor, Qualified Opportunity Fund (QOF) , or Qualified Rural Opportunity Fund (QROF) expressed interest in this tract? ❑ Yes ❑ No If yes, attach letter of interest, public statement,or website reference regarding intended investment, etc. Do you have a prospectus? ❑Yes ❑ No If yes, please attach file. ❑ No, however,there is general investment readiness. If no, briefly describe the potential investment opportunity(ies): Click or tap here to enter Washington State Department of Commerce I Opportunity Zones 2.0 2026 I Page 3 117 "'►' Washington State Department of Washington State Opportunity Zones 2.0 2026 "40 Commerce CENSUS TRACT NOMINATION APPLICATION TEMPLATE Washington State Department of Commerce I Opportunity Zones 2.0 2026 I Page 4 118 ►' Washington State department of Washington State Opportunity Zones 2.0 2026 Vi►q Commerce CENSUS TRACT NOMINATION APPLICATION TEMPLATE Timeline Will project(s) begin within five (5)years and be fully completed and occupancy ready within ten (10)years? ❑ Yes ❑ No If yes, describe in 100 words or less what critical steps and milestones will be necessary to achieve occupancy. List timelines for each step (such as utility connections, licensing, permitting, Superfund consent decree, environmental review, pre-feasibility study,feasibility study, etc.): Click or tap here to enter text. Investment Types Select"Yes" for the primary type(s) of project sector(s) for potential financing in this census tract. This determines which follow-up questions apply. You may select multiple sectors, if applicable 1. Agricultural and Rural ❑ Agricultural Processing ❑ Rural Tourism / Recreation ❑ Timber/ Forest Products ❑ Value-Added Agriculture ❑ Other(please explain): Click or tap here to enter text. 2. Commercial and Retail ❑ Hospitality/Tourism ❑ Main Street/ Downtown Revitalization ❑ Office/ Professional Services ❑ Retail Development / Grocery ❑ Other(please explain): Click or tap here to enter tex 3. Community Needs and Health Care ❑ Child Care Center ❑ Community and Human Services ❑ Food Security (e.g., location/area with limited access to fresh foods) ❑ Health Care Facility ❑ Other(please explain): Click or tap here to enter text. Follow up question: Are there currently missing or unmet community and health care services that will be created with this investment? ❑ Yes If yes, in 50 words or less, explain what services will be added to meet community need (such as Health Professional Shortage Areas (HPSAs) and Medically Underserved Areas (MUAs) federal designations): Click or tap here to enter text. 4. Housing and Residential ❑ Low-income Housing ❑ Mixed-Use (Residential and Commercial) ❑ Multifamily Rental Housing ❑ Senior Housing ❑ Single Family Housing ❑ Workforce Housing ❑ Other(please explain): "'lick or tap here to enter tex Follow up questions: For all housing projects, how many total units will be created? Click or tap here to enter text. Are at least 20% affordable units? ❑Yes 5. Industrial and Manufacturing ❑ Clean Energy/ Green Technology ❑ Food Processing / Cold Storage ❑ Logistics /Warehousing / Distribution ❑ Manufacturing Facility ❑ Other(please explain): Click or tap here to enter text. Washington State Department of Commerce I Opportunity Zones 2.0 2026 I Page 5 119 '►' Washington State Department of Washington State Opportunity Zones 2.0 2026 '40 Commerce CENSUS TRACT NOMINATION APPLICATION TEMPLATE 6. Infrastructure&Technology ❑ Broadband /Telecommunications ❑ Data Center ❑ Port/Transportation Infrastructure ❑ Renewable Energy ❑ Other(please explain): 7. Unknown//Other Other or unlisted sectors (Please briefly describe other sectors not previously listed): Click or tap here to enter text. For all Investment Types 1-7 selected above: How many new permanent full-time jobs will be created? Click or tap here to enter text. Will this result in new infrastructure or improved access to existing infrastructure such as utilities, roads, sidewalks, etc.? ❑ Yes ❑ No If yes, list type: Click or tap here to enter text. Part 2: Policy Test and Strategic Alignment Policy Planning Alignment Does this tract or potential project(s)align to any of the following? If so,to receive credit, in 50 words of less, explain the alignment in each section, reference pertinent document (URL is preferred) and page numbers. Check"Yes"to all that apply. ❑ Downtown, Subarea or Main Street revitalization plan Click Of Lap nere to enter text. ❑ Climate action plan >Iick or tap here to enter text. ❑ Economic development strategy (such as comprehensive or local economic development strategy) Click or tap here to enter text. ❑ Housing action plan or housing needs assessment Click or tap here to enter text. ❑ Local government (county or city) comprehensive plan Click or tap here to enter text. ❑ Policy for streamlined or efficient permitting Click or tap here to enter text. ❑ Public Capital Improvement Program (CIP) Click or tap here to enter text. ❑ Regional growth strategy/ Regional Growth Center Click or tap here to enter text. ❑ State Economic Development strategic plan (SED) Click or tap here to enter text. ❑ Tax Increment Finance Area (TIF) Click or tap here to enter text. ❑ Transit-accessible or within designated growth area Click or tap here to enter text. ❑ Tribal economic development plan Click or tap here to enter text. If no URL is available for responses above,attach reference documents State Priority Alignment Do the anticipated tract's investment(s)align with Washington State priority sectors? (select "Yes"to all that apply) ❑ Agriculture/ Food Systems / Forestry ❑ Clean Energy/ Climate Resilience ❑ Creative Economy ❑ Entrepreneur/Start up business ❑ Healthcare/ Life Sciences ❑ Housing (workforce, affordable, missing middle, low income) Washington State Department of Commerce I Opportunity Zones 2.0 2026 I Page 6 120 "'►' Washington State department of Washington State Opportunity Zones 2.0 2026 '40 Commerce CENSUS TRACT NOMINATION APPLICATION TEMPLATE ❑ Industrial Symbiosis / Circular Economy (reduce reuse recycle) ❑ Information and Communication Technology ❑ Manufacturing (including aerospace, maritime, clean tech, defense) ❑ Tourism and recreation ❑ Workforce Development Complementary Programs Does this tract align with other local, state or federal investment programs? (select "Yes"to all that apply) ❑ Affordable Housing Cleanup Grant Program (Department of Ecology) ❑ Community Empowerment Zone or other tax incentive area ❑ Environmental Protection Agency (EPA) or State Brownfields program ❑ Local programs "other" (describe below) ❑ Low Income Housing Tax Credit ❑ New Market Tax Credit (NMTC) eligible ❑ Safer Product Certification Subsidy Program (Department of Ecology) ❑ State infrastructure investment ❑ U.S. Department of Agriculture- Rural Development (USDA-RD) programs ❑ U.S. Department of Housing and Urban Development (HUD) programs (Community Development Block Grants (CDBG), HOME, etc.) ❑ Washington State Comprehensive Climate Action Plan (CCAP) ❑ Other investment programs not listed - briefly describe below Comment box - in 100 words or less, explain the synergy of how alignment compliments benefit to tract Gi ck or tap here to enter text. Part 3: Community Support and Capacity Documented Support Attach documentation for each box checked. Must have documentation to receive points. (Check"Yes"to all that apply). ❑ Tribal government resolution or letter of support ❑ Local government resolution or letter of support ❑ Letter of support from elected official(s) ❑ Support from tribal government, local government and or elected officials confirmed but documentation pending (please briefly describe): Click or tap here to enter text. ❑ Community development organization (Community Development Financial Institution (CDFI), Public Development Agency, etc.)that expressed support (e.g., letter of support) ❑ Active ADO or local economic development organization that has expressed support (e.g., letter of support) ❑ Other support not mentioned above (please briefly describe): Click or tap here to enter text. Economic Development Partners Which potential organizations could be active partners in developing and attracting investments to this opportunity zone? Select all that apply. ❑ Associate Development Organization (ADO) ❑ Community Development Financial Institution (CDFI) Washington State Department of Commerce I Opportunity Zones 2.0 2026 I Page 7 121 "'►' Washington State Department of Washington State Opportunity Zones 2.0 2026 i►,Commerce CENSUS TRACT NOMINATION APPLICATION TEMPLATE ❑ Chamber of Commerce ❑ Economic Development District ❑ Housing Authority ❑ Main Street program ❑ Port District ❑ Public Development Authority (PDA) ❑ Tribal Economic Development Office ❑ Workforce Development ❑ Other (please briefly explain): lick or tap here to enter text. Community Engagement In 200 words or less, summarize any community engagement conducted regarding development of this tract. (This aligns with the Washington State HEAL Act. Chapter 70A.02 RCW: Environmental Justice): (dick or tap here to enter text. Part 4: Tribal Considerations Complete this section if the census tract includes tribal lands with planned project(s). Will any planned project(s) be on tribal reservation or trust land under the Bureau of Indian Affairs? ❑ Yes Part 5: Narrative Summary Elevator Pitch: In 200 words or less briefly summarize the benefit to community such as estimated projections of clients served,jobs created, capacity increased, capital investments, alignment with community needs, and any other important outcomes. Feel free to include information not requested but that you feel is important. >lick or tap here to enter texi Part 6:Attachments Checklist Check to indicate the documents included with this application. This checklist is to help you ensure you have attached any pertinent documents ❑ Tribal government resolution or letter of support- Part 3: Documented Support ❑ Local government resolution or letter of support- Part 3: Documented Support ❑ Letter of support from elected official(s) - Part 3: Documented Support ❑ Community development organization (Community Development Financial Institutions (CDFI), Public Development Agency, etc.) letter of support - Part 3: Documented Support ❑ Active ADO or local economic development organization letter of support - Part 3: Documented Support ❑ Documentation demonstrating business plan (project registered, permit(s) applied for,team hired, studies, environmental assessments, etc.) - Part 1: Development Pipeline (project specific) ❑ Documentation demonstrating prospectus or investor, QOF, or QROF letter of interest, public statement,website reference, etc. - Part 1: Development Pipeline (project specific) ❑ Documentation demonstrating prospectus - Part 1: Development Pipeline (project specific) ❑ Letter of availability from the water utility. - Part 1: Development Pipeline (project specific) ❑ Contract with electric utility covering project needs. - Part 1: Development Pipeline (project specific) ❑ Documents without URL referenced in Part 2: Policy Planning Alignment Washington State Department of Commerce I Opportunity Zones 2.0 2026 I Page 8 122 '► Washington State Ili Department of Washington State Opportunity Zones 2.0 2026 1411,,Commerce CENSUS TRACT NOMINATION APPLICATION TEMPLATE Section C: Certification I certify that the information provided in this application is accurate and complete to the best of my knowledge. I understand that the census tract nominated may or may not be selected for Opportunity Zone designation, and that final selection is at the discretion of the Governor based on Commerce recommendations.*❑Yes Signature Date Title Submittal Instructions Submit completed nomination application and attachments in the online portal by 5:00 p.m. Pacific Time on Thursday, May 28, 2026. Commerce staff reserve the right to follow up for additional clarifying information. Applications that are not fully responsive may be considered incomplete and disqualified. Determination protests will not be permitted for this opportunity. Commerce reserves the right to consider geographic diversity when determining Opportunity Zone designation. Washington State Department of Commerce I Opportunity Zones 2.0 2026 I Page 9 123 "►' Washington State Department of Washington State Opportunity Zones 2.0 2026 'r ff ev Commerce CENSUS TRACT NOMINATION APPLICATION TEMPLATE Opportunit Zone 2.0 Nomination Application Definitions Census tract. A geographic area defined by the U.S. Census Bureau used for data collection and program eligibility. Opportunity Zone. A federally designated census tract where investments, under certain conditions, may be eligible for preferential tax treatment. Qualified Opportunity Fund (QOF). An investment vehicle that files either a partnership or corporate federal income tax return and is organized for the purpose of investing in Qualified Opportunity Zone property. Qualified Rural Opportunity Fund (QROF). A type of Qualified Opportunity Fund-eligible for enhanced benefits when investing in federally defined rural zones. Specifically, a QOF that holds at least 90% of its assets in Qualified Opportunity Zone Property (QOZP) that is A. Qualified opportunity zone business property (QOZBP) substantially all of the use of which, during substantially all of the QOF's holding period for such property, was in a QOZ comprised entirely of a rural area, or B. QOZ stock, or a QOZ partnership interest, in a qualified opportunity zone business in which substantially all of the tangible property owned or leased is QOZBP and substantially all the use of which is in a QOZ comprised entirely of a rural area. Qualified Opportunity Zone Business Property - tangible property used in a trade or business of the QOF if such property was acquired by the QOF by purchase after the applicable start date, the original use of such property in the QOZ commences with the QOF or the QOF substantially improves the property, and during substantially all of the QOF's holding period for such property, substantially all of the use of such property was in a QOZ. Rural area. Any area other than a city or town with a population greater than 50,000, and any urbanized area contiguous and adjacent to a city or town with a population greater than 50,000. Affordability. Affordability is achieved when a household's rent and utility costs (other than telephone) do not exceed 30 percent of the monthly income for the targeted income group as adjusted for household size. In the context of homeownership, affordability occurs when a household's monthly housing costs are generally no more than 38% of monthly household income and total debt is no more than 45% of monthly household income. Housing costs include mortgage principal, interest, property taxes, homeowner insurance, homeowner association fees, and land lease fees, as applicable. Total debt includes other debt and utilities. Affordable housing. Residential housing for rental occupancy which, as long as the same is occupied by low-income households, requires payment of monthly housing costs, including utilities other than telephone, of no more than thirty percent of the household's income. (RCW 43.185A.010(1)) In the context of homeownership, affordability occurs when a household's monthly housing costs are generally no more than 38% of monthly household income and total debt is no more than 45% of monthly household income. Housing costs include mortgage principal, interest, property taxes, homeowner insurance, homeowner association fees, and land lease fees, as applicable. Total debt includes other debt and utilities. Associate Development Organization (ADO). A local economic development nonprofit corporation that is broadly representative of community interests. Broadband infrastructure. Networks of deployed telecommunications equipment and technologies necessary to provide high-speed internet access and other advanced telecommunications services to end users. Washington State Department of Commerce I Opportunity Zones 2.0 2026 I Page 10 124 ►' Washington State Department of Washington State Opportunity Zones 2.0 2026 Vi►g Commerce CENSUS TRACT NOMINATION APPLICATION TEMPLATE Brownfield. An abandoned or underutilized property that may have environmental contamination. Childcare center. An agency that regularly provides early childhood education and early learning services for a group of children for periods of less than 24 hours Clean energy. Energy from a renewable resource: (a) Water; (b) wind; (c) solar energy; (d) geothermal energy; (e) renewable natural gas; (f) renewable hydrogen; (g) wave, ocean, or tidal power; (h) biodiesel fuel that is not derived from crops raised on land cleared from old growth or first growth forests; or (i) biomass energy. It also includes nuclear energy. Community and human services: programs designed to improve the quality of life, well-being, and self-sufficiency of individuals and families such as mental health services, disability support, adult care and vocational rehabilitation. Community Development Financial Institution (CDFI). A specialized, mission-driven financial organization certified by the U.S. Department of the Treasury to provide fair, responsible financing to underserved, low-income communities. Community Empowerment Zone. A designated, geographically defined area (often in rural or distressed urban areas) intended to revitalize local economies by encouraging businesses to locate, expand, and create jobs. The program provides specific Business and Occupation (B&O) tax credits to eligible Community engagement. Activities that meaningfully involve community members, Indigenous rights-holders and/or stakeholders to inform decisions for planning, policies, programs, and services that will impact them. Development pipeline. A list or sequence of projects that are planned or underway in a specific area. Food security. When all people at all times have access to sufficient, safe, nutritious food to maintain a healthy and active life. Health care facility. A facility that provides health care services directly to patients, including but not limited to, a hospital, clinic, health care provider's office, health maintenance organization, diagnostic or treatment center, neuropsychiatric or mental health facility, hospice, or nursing home. Health Professional Shortage Area (HPSA). A federally designated area with too few primary care, dental, or mental health providers. Industrial symbiosis/circular economy. A system where one facility's waste streams—energy, water, materials and residuals—become valuable inputs for other businesses. Low-income household. A single person, family or unrelated people living together whose adjusted income is less than eighty percent (80%) of the median family income, adjusted for household size, for the county where the project is located. Manufacturing facility. An industrial building where raw materials, components, or parts are transformed into finished goods using machinery, equipment, and labor. Median Family Income (MFI). The dollar amount that divides income distribution into two equal groups, calculated annually by the U.S. Census Bureau and HUD User (.gov), with half earning above and half below. Medically Underserved Area (MUA). A federally designated area with too few primary care providers, high infant mortality, high poverty, or a high elderly population. Washington State Department of Commerce I Opportunity Zones 2.0 2026 I Page 11 125 ►' Washington State Department of Washington State Opportunity Zones 2.0 2026 Vi►g Commerce CENSUS TRACT NOMINATION APPLICATION TEMPLATE Mixed-use development. A building subject to a regulation specifying allowable residential proportions within mixed-use areas. Multifamily housing. Projects intended to provide habitable space to more than one household (including single-person households). This can take any of the following forms: • A single building consisting of two or more distinct units, each of which is inhabited by an unrelated household. This encompasses a continuum from duplexes to high rise apartment buildings • A set of at least two structures, initially constructed as housing for unrelated households, which is managed as a single functional unit. This includes single-residency houses that are owned and managed by a single entity • A building, or set of buildings, which by initial design or through adaptive renovations, is used to provide sleeping space to more than one single individual, with shared living, food preparation, and sanitary facilities. This includes shelters, dormitory-style housing (e.g. for seasonal farm workers), and group home facilities. Other economic development organizations. Chambers of commerce, business alliances, industry trade associations, professional associations, public-private partnerships, and non-profit community development organizations. Public Development Authority (PDA). A quasi-municipal corporation or public corporation created by a city, town, or county through ordinance or charter to perform specific public purposes, such as economic development, housing, or managing facilities. Rental housing. A housing development, of any size or type, that requires an occupancy or lease agreement in addition to monetary remuneration in exchange for shelter and sometimes utilities and services. Senior unit. Intended for and solely occupied by persons 62 years of age or older; or intended and operated for occupancy by persons 55 years or age or older. In order to qualify for the "55 older" housing exemption, a facility or community must satisfy each of the following requirements: (i) At least 80 percent of the units must have at least one occupant who is 55 years of age or older; and (ii) The facility or community must publish and adhere to policies and procedures that demonstrate the intent to operate as "55 or older" housing; and (iii) The facility or community must comply with HUD's regulatory requirements for age verification of residents. Single-family housing. A structure designed for residential use by one family, or a unit, so designed, whose owner owns, directly, or through a non-profit housing organization, an undivided interest in the underlying real estate, including property owned in common with others. In the HTF context and in terms of HTF eligible housing models, both homeownership and rental housing models can involve the development or acquisition/rehab of single-family structures. The housing model rather than the physical building structure determines HTF program eligibility, as well as application and contracting criteria. Underutilized land. Parcels of land zoned for more intensive use than what currently occupies the property. Includes publicly held surplus land for redevelopment. Units. A single-unit family residence detached or attached to other housing structures. Utilities. Systems used to generate or distribute any services such as heat, electricity, sewage, gas, water, and telecommunications. VVashington State Department of Commerce I Opportunity Zones 2.0 2026 I Page 12 126 ►' Washington State Department of Washington State Opportunity Zones 2.0 2026 '40 Commerce CENSUS TRACT NOMINATION APPLICATION TEMPLATE Value-added agriculture. An activity or process that allows farmers to retain ownership and that alters the original agricultural product or commodity for the purpose of gaining a marketing advantage. Workforce development. A strategic process of connecting individuals with training, education, and support to build a skilled, adaptable labor force that meets employers' needs, fostering economic growth and individual stability by bridging skills gaps and creating career pathways through initiatives like mentorship, apprenticeships, and support services Workforce housing. Rental housing with monthly costs that do not exceed 30 percent of the monthly income of a household whose income is at or below 80 percent of the median household income adjusted for household size, for the county where the household is located, as reported by the United States department of housing and urban development. Resources and References (not to be included in nomination application, but for your awareness) This application was developed using the following resources: Washington State Resources • Washington State Department of Commerce 2018 OZ Application Instructions: commerce.wa.gov/wp-content/uploads/2018/03/OZ-Application-Instructions.pdf • Commerce Opportunity Zones Page: commerce.wa.gov/growing-the-economy/opportunity- zones/ • Washington State OZ 2.0 Nomination Application Scoring Criteria 2026 (companion to this nomination application) Federal Legislation and Guidance • H.R. 1 (119th Congress) - One Big Beautiful Bill Act: congress.gov/bill/119th- congress/house-bill/1 • IRS Notice 2025-50 (Rural OZ Definition): irs.gov/publrs-drop/n-25-50.pdf • IRS Opportunity Zones Main Page: irs.gov/credits-deductions/businesses/opportunity-zones Best Practices and Research • Economic Innovation Group - Opportunity Zones 2.0 Designation Playbook: eig.org/opportunity-zones-2-0-designation-playbook • EIG - 8 Principles for Successful Opportunity Zone Designation: eig.org (see OZ Governor's Guide) • CDFA Opportunity Zones Resources: cdfa.net Mapping and Eligibility Tools • EIG Interactive OZ Eligibility Map (includes 2026 criteria): opportunityzones.com/map • HUD Opportunity Zone Locator: hudgis-hud.opendata.arcgis.com • Novogradac OZ Mapping Tool: novoco.com/resource-centers/opportunity-zones Key Changes for Opportunity Zones 2.0 The 2026 application includes: • Investment Pathway Categories: Section to enable pathway-sensitive scoring (housing vs. industrial vs. agricultural projects have different readiness indicators) • Rural and Tribal Section: Captures enhanced QROF benefits (30% vs. 10% tax benefit) available under 2.0 federal rules • Stricter Eligibility: New 70% median family income threshold (down from 80% in 1.0) and 125% anti-gentrification cap • No Contiguous Tracts: The adjacent tract provision used 7 times in 2018 has been eliminated • Published Scoring Criteria and public comment period: Transparent application design and scoring framework published for public comment before application period. Washington State Department of Commerce I Opportunity Zones 2.0 2026 I Page 13 127 '', erJ ," Opportunity Zones - 2.0 May 19, 2026 Presented by Gary Ballew, Assistant City Manager 128 ■ (7,,c • -„k Purpose of Tonight's Presentation • Council action : nominating three census tracts to put forward for Governor's consideration . • Topics covered : • What is an Opportunity Zone? • How do Opportunity Zones support economic development? • What's the process in Washington State? • Which zones are we recommending? • Why these three zones? 129 ■ What is an Opportunity Zone? • Designated Census Tracts • Governor recommends, U.S. Treasury designates • Created in 2017 Tax Cuts and Jobs Act, reauthorized in the 2025 One Big Beautiful Bill Act 130 ■ Opportunity Zones and Economic Development • Eligible census tracts meet certain poverty standards • Designation provides investment benefits around capital gains • Encourages investments in low-income neighborhoods with a goal of providing jobs and housing • Residential & mixed-use projects • Commercial & Industrial • Business expansion • Community development & infrastructure 131 ■ What is the Process in Washington State • Eligibility & Evaluation Criteria • Community Need • Market & Investment Readiness • Policy Alignment • Local Government Support 132 ■ What is the Process in Washington State? • Nomination • Anyone can apply with the State • Commerce will take best application of eligible tracts • Application due May 8th • Governor's window July 1 - September 30, 2026 to nominate • Treasury Certification targeted for November 28, 2026 133 MFI 105% PR 21.14% —ZUo MFI;95% PR:9.06% MFI:119% PR:11.96% MFI.'81`�6 1.--=-1 7 PR:11.37% ` ak;Ind MFI:54°o PR:37,67% PR:14.88% MFI:128% Terrace II MFI:130*eights PR:8.39% MFI:81% PR:17.89°fo l MFI:53% -ter Isopm\PR:34.8' West MFI:133% Valley r PR:628% MFI:141% MFI:117% MFI:93% PR:9.09% PR:5.79% _ MFI:73a PR:11.84% PR:17.35% MFI:133% PR:9.82% MFI•,62% N1FI:67°�6 PR:19r1491 MFI:82% MFI:76% PR:5.65% \ %PR:15.79 PR:1631"�6 /I MFI:111% PR:7.77% titi MFI:77% MFI:128% MFI.1 56% PR:9.44% PR:8.01% no.In ascot 1111 134 ■ • le- Why These Three Tracts? • Provide the mix of eligibility and investment opportunities . • Mill Site - redevelopment potential on former industrial land . • Downtown Yakima - civic and commercial core revitalization . • 18th St & Nob Hill - infill development and corridor upgrades. 135 • Questions? Council Action 136